Entering and Succeeding in China's Complex Mobile Gaming Ecosystem
Peng Lu Vice President, Tencent Games
Email: [email protected] Table of Contents
• China Mobile Game Overview
• China Mobile Game Industry Environment
• Sharing of Tencent’s Mobile Game Publishing Practice China has Become the World’s Largest Smartphone Market 全球各主要地区智能手机销 量数据 Smartphone shipment forecast (2013-2017)(2013-2017)
2013E unit 2017E unit shipments Country 2013E market share 2017E market share 2017/2013E growth shipments (MMs) (MMs)
China 301.2 32.8% 457.9 30.2% 52.0%
USA 137.5 15.0% 183 12.1% 33.1%
United Kingdom 35.5 3.9% 47.5 3.1% 33.8%
Japan 35.2 3.8% 37.7 2.5% 7.1%
Brazil 28.9 3.1% 66.3 4.4% 129.4%
India 27.8 3.0% 155.6 10.3% 459.7%
Others 352.5 38.4% 568.1 37.5% 61.2%
Total 918.6 100.0% 1516.1 100.0% 65.0%
Source: IDC、Tencent Analysis Number of Mobile Internet Users Surpassed PC Internet Users in China
% of Chinese Internet Users Accessing the Web via Desktop PCs vs. via Mobile Phones,6/07 - 12/12
100% 96% 90% 80% 75% 70% 71% 60% 50% 40%
30% 28% 20% 10% 0% 6/07 12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12
via desktop PC via mobile phone
Source: CNNIC、Tencent Analysis Mobile Internet Market Maintains Rapid Growth in China
Mobile Internet Market Scale of China (2009-2016E)
45 120%
40 100% 35
30 80%
25 60% 20
15 40%
10 20% 5
0 0% 2009 2010 2011 2012 2013E 2014E 2015E 2016E
market scale($Billion) Y/Y Growth
Source: iResearch、Tencent Analysis Chinese Mobile Gaming Market is under Explosive Growth
Mobile Game Market Scale of China (2009-2014E) Mobile Game User Scale of China (2009-2014E)
2,500 80% 450 70%
400 70% 60%
2,000 350 60% 50% 300 50% 1,500 250 40% 40% 200 30% 1,000 30% 150 20% 20% 100 500 10% 10% 50
0 0% 0 0% 2009 2010 2011 2012 2013E 2014E 2009 2010 2011 2012 2013E 2014E
market scale( $MM) Y/Y Growth user scale(MM) Y/Y Growth
Source: iResearch、iiMedia、Tencent Analysis Million Dollar Games Emerge in China Market List of Top Revenue Mobile Games in China (05/2013)
Game name Game type 05/2013 revenue($MM)
My Name is MT OL Card trading 8.20
Fishing Joy Casual competitive 5.70
Space Hunter ARPG 4.90
The Legend of King ARPG 4.60
Big Head Card trading 4.10
Meng Jianghu Card trading 1.65
Wang Xian ARPG 1.65
Armed Warriors ARPG 1.65
The World RPG 1.30
The Magic Card Fantasy Card trading 1.15
Source: Tencent Analysis Table of Contents
• China Mobile Game Overview
• China Mobile Game Industry Environment
• Sharing of Tencent’s Mobile Game Publishing Practice Android is Mainstream but is Fragmented
Market Share of Smartphone Systems in China Market Share of Screen Resolution of Android in China (Q1,2013) (Q1,2013)
800*400
480*320
848*480
40.3% 320*240 11% 1280*720
30.1% 960*540 other
1280*800 Market share of Android Smartphone vendors in China (Q1,2013)
80% samsung
huawei 14% Android iOS Symbian Windows others zte
K-touch
gionee
HTC Source: IDC、eGuan 、Tencent Analysis Network Speed and Data Tariffs Impact Mobile Gaming Market
Internet Access of China Smartphone (Q1,2013) Reason distribution of users not satisfied with China Mobile Internet (2013Q1)
Mobile data tariffs 59%
Mobile terminal compatibility 40%
34% Mobile network access speed 25% 44%
APP quality 22%
APP price 19%
User habit 12% 22%
Others 6%
0% 10% 20% 30% 40% 50% 60% 70% 2G 3G WIFI Size does matter.
Source：BAIDU 、eGuan 、Tencent Analysis Hot Games in China are Different from those in USA/Europe
Top 10 Games (Revenue) in APP Store China (06/2013) Top 10 Games (Revenue) in APP Store US (06/2013) 美国地区 收 游 榜 Product Genre APP STORE Product 营 TOP 10 戏 单 (2013.04)Genre
Card trading Casual My Name is MT Online Candy Crush Saga ® SLG SLG Clash of Clans Clash of Clans Card trading Card trading Big Head MARVEL War of Heroes RPG Social Dragon Force Hay Day RPG RPG The King 2 HD Modern War Card trading Casino The Magic Card Fantasy Big Fish Casino ACT Sandbox build-up The Legend of King Minecraft – Pocket Edition Card trading SLG My Name is MT Online (global) Kingdoms of Camelot: Battle for the North RPG Simulation Shen Xiandao The Hobbit: Kingdoms of Middle-earth RPG Adventure Chaos Fighters The Simpsons™: Tapped Out
Source: App Annie、Tencent Analysis Complex Mobile Game Publishing Chain
Europe/USA R&D Publishing
Distribution& promotion channels China R&D Publishing Game Payment Game Stores Communityies
IOS 平台 • Platform currency
• SMS billing
rd Android 平台 • 3 party payment
• E-bank • Pre-paid card
Source: Tencent Analysis Distribution Channels are Fragmented and Complicated Channel Company or product
Pre-installation
ROM flashing
Game stores
Mobile APPs
Mobile advertisement
Game portals/communities Credit Card Payment is NOT Popular in China
Payment channel Company or Product Market Share
SMS billing 20%
Virtual Currency 20%
3rd party payment system 40%
骏 梦一卡通 Pre-paid card 10%
E-bank 10%
Source：Tencent Analysis Key Success Factors
Know what Chinese users want Understand China mobile game market
Support diversity of users Develop multiple Game Quality mobile devices payment channels
Work with best distribution & Consider network situation and promotion channels traffic tariff Table of Contents
• China Mobile Game Overview
• China Mobile Game Industry Environment
• Sharing of Tencent’s Mobile Game Publishing Practice In-depth Understanding of Chinese Internet Users
Tencent News Peng You QTalk Tencent search QQ Game Tencent Games
Qzone QQ
IM
Tencent micro-blog working while listening to QQ music
WeChat WeChat Strong Game Operation Capability Tencent Games Revenue (1Q, 2010 - Q2, 2013) 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 Revenue ( Billion USD)
Tencent Games Market share (1Q,2010 - 1Q,2013) Revenue of world’s top game companies,1Q-3Q, 2012 (Billion USD)
100% 7.6 8 25% 25% 29% 31% 80% 37% 36% 38% 38% 39% 39% 39% 41% 44% 7 6.3 6 60% 5 40% 4 3.5 3 3 2.8 2.4 2.3 20% 3 2 1 0.9 0.9 0% 0.8 0.6 0.6 1 0.5 0.4 0.3 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 0 Others top4-10 SNDA NETEASE TENCENT
Source：Public annual reports & Tencent research Full Coverage of Mobile Game Value Chain
Product Distribution, Marketing & Customer Payment Operation Service R & D Licensing
More…
Source：Tencent Analysis Product Optimization with Strong Data Driven Game Optimization
Starter guide
Level
Combat
User Behavior Data Growth system
Tencent Interaction Big Data Visual effects
Payment
Meticulous marketing Comprehensive & Powerful Distribution Channels
SNS Platform WeChat Mobile QQ Mobile Qzone Mobile QQ Games § Register user § MAU: 478MM § MAU: 40MM § MAU: 357MM accounts: 400MM § DAU: 120MM § DAU: 10MM § MAU: 236MM
Tool APP Tencent APP Center QQ mobile browser QQ mobile manager
§ Accumulative download: § MAU: 37MM § MAU: 84MM 8billion § DAU: 10MM § Daily download: 20MM
Source：EGUAN 、iResearch 、Tencent Analysis Social Network-driven Marketing
Tencent social network users Interactive Marketing
Game Store Enter Game SNS Invite CtoC message sharing
• MAU 818MM
• MAU 626MM
Share to SNS Sending heart
• MAU 247MM
• MAU 236MM Click here to jump into the game page. Source：Tencent Analysis Comprehensive and Easy Payment Channel
In Game Payment Full payment list Payment method
QQ points New Users Bank card WeChat 6 payment options TenPay Mobile pre-paid QQ card card
QQ points
Pay by WeChat Frequent Users User One click Behavior Smart Payment Pay by bank card
Pay by Tenpay
Pre-paid mobile card
QQ card The Explosive Power of Tencent Platform: WeMatch Case Study • Accumulative download: 50MM+ • DAU : 30MM • covers 11.9% mobile Internet users in China • covers 15.6% mobile game users in China.
• Accumulative download: 40MM+ • DAU: 25MM+ Aug.15.2013 • Accumulative download: 30MM+ • DAU: 20MM+ Aug.13.2013
• Accumulative download: 20MM+ • DAU: 15MM+ Aug.11.2013
• Accumulative download: 14MM+ • DAU: 10MM+ Aug.09.2013 • Top1 free game in App Store china
• launch Aug.07.2013
5 hours after launch Aug.05.2013 Find the Right Partner is the Key